Daily market update: Babcock International, BAE Systems, QinetiQ

Considering the week ahead, markets were on fairly fine form this Monday, buoyed by a slight fall in the price of oil and some serious AI game, which even permeated London markets courtesy of the FTSE 100’s biggest riser Computacenter.

Recent UK economic data has shown the impact of AI infrastructure rollout on growth, and shares in Computacenter ended the day up more than 13% after it announced a record backlog of orders.

London markets have often been seen as providing an alternative for investors looking to attain diversity and have benefited from days when the bears lead the charge on the AI story, but there is a small but significant group of names taking full advantage of the AI charge.

That charge is most often felt coursing through Wall Street and today has been no exception. Cash is crucial in the race to build faster, build better and beat the competition which is why Meta has announced plans for a $95 billion equity fundraising to launch early next year.

There is a significant shift from companies realising that the sums required are becoming impossible to fund in house. Every day seems to bring another deal to the table, with SpaceX announcing a financing agreement with Apollo Global Management.

The figures involved are mind boggling but the potential rewards are similarly huge even as investors are becoming wary that not every player will last to the end of the game.

Defence stocks

It’s going to be a long couple of days as we all wait to see exactly what the Chancellor will pull out of his Budget briefcase, but expectation he may go further on funding defence commitments than had previously been expected has lifted UK defence stocks today.

Babcock International, BAE Systems and Qinetiq were amongst those with the biggest share price gains after the PM confirmed John Healey will set out a path to meeting NATO targets on Wednesday.

The world is a precarious place, and the British public is being nudged into a greater awareness of the risks with the current defence secretary going so far as to urge the public to stockpile supplies.

Finding the funds looks set to be less straight forward than simply allocating additional funds, with reports the Chancellor wants to use public finance institutions which would enable him to borrow more without breaching those all-important fiscal rules.

Whether the finer details are fully laid out in the Budget, or whether the sector will still have to wait for next year’s spending review will undoubtedly grab column inches, but politically it could be enough to cushion Mr Healey from tough questions about his former stance on meeting this crucial spending target.